When Small Gaps Become Large Losses

Introduction

Major accidents can develop when several smaller factors align, even when none appear significant on their own. Maintenance issues go unresolved. Employee training falls behind operational reality. Emergency procedures are incomplete. Communication gaps emerge between different parties responsible for the work. Together, these conditions can increase the severity of an event.

A fatal liquid nitrogen release at a poultry processing facility investigated by the U.S. Chemical Safety Board (CSB) shows how weaknesses across several operational practices can shape the outcome.

Why Operational Discipline Matters

The CSB investigation report identified five safety issues: a single point of failure in the equipment’s design, atmospheric monitoring and alarm systems, emergency preparedness, process safety management, and product stewardship. The report also found that employees were not adequately trained to recognize the hazard. Together, these findings point to how gaps across several operational controls can contribute to a much larger loss.

The difference between efficient functionality and severe accident often lies in how an organization prepares for those situations and responds when they occur. Maintenance programs, safety procedures, hazard communication practices, training requirements, and emergency response planning can all influence how a loss develops, and how severe the outcome is once an event occurs.

Many insurance submissions lack granularity around maintenance, training and shutdown/startup procedures. A conversation with the insured about operational practices can provide context that may not appear in a standard application and help explain how a business responds when equipment malfunctions or conditions change.

Questions worth exploring may include:

• How is preventive maintenance managed and documented?
• How are equipment modifications reviewed before implementation?
• How are new hazards communicated to employees?
• What training is provided when operations change?
• How are near-misses investigated and documented?
• How are emergency response procedures maintained and tested?
• When was the last formal safety review conducted?
• How does the facility document, validate, train on, and periodically review its shutdown, startup, and restart procedures?
   

These discussions help move the placement conversation beyond classifications and financial information toward a more complete understanding of how the operation functions in practice, and support conversations about coverage structure and underwriting strategy.

Where We Fit

Berkley Specialty Excess underwrites environmental risks across operations, products, professional services, and site conditions. We support monoline, package, primary, excess, and layered placements, subject to risk selection and issued forms.

When brokers understand how the insured manages these operational factors, the underwriting discussion can focus more directly on the issues that affect coverage structure, terms, and placement strategy.

In Conclusion

The CSB findings illustrate why operational discipline matters: the severity of a loss can be shaped by how multiple operational practices work together. Asking how an insured manages those practices can strengthen the broker’s understanding of the account, support more informed placement decisions, and help demonstrate value that extends beyond securing a quote.